TRENDING

The FAR debate rages over determinations of competitive range

Jun 16, 1997

Rewriting these rules is key to reinventing procurement. The first draft of the revisions, however, drew much controversy and criticism. The second draft, published in the May 14 Federal Register, wisely avoids trying to revolutionize the procurement process in one swift stroke and instead focuses on incremental improvement.

Unfortunately, the revisions are the subject of strong debate. Opponents argue that the revisions would lead to a dozen offerers quickly being whittled down to one or two finalists. Proponents, meanwhile, point to the wasted effort of keeping alive six or eight companies throughout a lengthy procurement that only one will win. Neither side, however, offers much evidence to support their claims.

For all the controversy, the issue comes down to a matter of statistical probability-the chance of prematurely eliminating a superior contractor weighed against the effort to keep a marginal offerer in the competitive process. This would be easy for a contracting officer to determine, simply by analyzing past procurement history. Given a dozen offerers in the competitive range, what have been the odds, over the past decade or so, that the third-ranked offerer would win the contract award? Or the sixth? Or the ninth?

Arriving at these percentages for all possible permutations of rank and number of offerers would give contracting officers an objective way to judge the potential benefits of keeping in the competition the fifth-ranked of eight offerers or the fourth-ranked of five. It may well be the solution to the problem of making procurement efficient.

There are other notable features of the second draft. Among the most interesting are the new rules regarding the scope of discussions.

One commonly voiced problem in the current system is that offerers can't tell whether or by how much they should exceed the minimum criteria.

The solicitation rarely gives offerers enough information to judge whether the procuring agency will value an additional feature more than its extra cost.

The draft regulations offer two kinds of help. First, the government can release to all offerers its estimate of a reasonable price or cost.

This can help vendors calibrate proposals to meet the government's expectations. Offerers also may be helped by knowing an agency's budget for a contract, assuming it is different from the price estimate.

The second innovation would provide more specific information. During negotiations, the government will be able to "negotiate with offerers for increased performance."

Alternatively, the procuring agency can suggest that a proposal would be more competitive if it offered fewer extras at a lower cost. These changes would let an offerer learn if its proposal has overshot or undershot the mark.

The new draft continues the trend toward improved communications between vendors and the government, which will likely make acquisitions easier and more effective.

However, procurement officials must diligently guard against more open communications degenerating into unfair preference. A reprise of such past abuses will lead to future restrictions.

There is much more to this lengthy proposal, and it warrants careful study. At some point in the not-too-distant future, this draft, or something similar, will define the new environment in which we all must sink or swim.

Joseph J. Petrillo is an attorney with the Washington law firm of Petrillo & Associates.